There are over 33 million small businesses in the US, and they create an average of 525,000 new jobs every year! If you’re a small business owner or are planning on becoming one, then you should be proud of contributing to the country’s economy.
Part of being a good entrepreneur is knowing how to protect your company. And that means having the right insurance policies, in case anything unexpected happens.
However, you don’t want to buy every single policy you can get your hands on. Otherwise, you’ll waste money.
Here are a few things to consider, so you’ll know exactly what type of insurance you need.
Assess Your Type of Business and Risks
Small businesses come in all sizes and shapes, so to speak; a restaurant in Georgia with 50 employees will have different needs than an arts and crafts store in California with five workers.
If you have employees besides yourself though, then you’ll definitely need workers’ compensation. Getting a Georgia workers’ comp quote is a good idea since you’ll find out how much it’ll cost and what it entails. For example, there are exemptions in this state, so it’s worth researching.
Also, what risks do you face? For instance, if you run a restaurant, then food spoilage insurance is ideal. It’ll cover your ruined ingredients if the power goes out.
The risks might apply to equipment and assets too. Let’s say you have a fleet of vehicles; you’d want to get commercial auto insurance then. This protects your drivers on the road.
Go Over the Legal Requirements
In some places, you’re required by law to have certain insurance plans. The same goes for specific industries too.
Never just assume you’re off the hook because you didn’t know you needed active policies. You’ll always be penalized if you’re caught without them.
And worse yet, if disaster strikes, you won’t have coverage, and you’ll need to pay out of pocket. This can leave you in financial ruin and force you to close your company.
Know the Types of Insurance Available
It’s true that there are tons of different insurances you can get, and most of them probably won’t apply to you. However, knowing your options will help immensely, as you’ll be able to focus on the relevant ones and filter out the irrelevant policies.
Here are some of the most common types of insurance that small businesses need.
General Liability Insurance
General liability insurance protects you against claims if someone gets hurt or causes damage. This can be anyone from customers to vendors.
Do note that this is different from workers’ comp; if your workers get hurt or cause property damage, then that’ll fall under this insurance type.
Professional Liability Insurance
Everyone makes mistakes, including you. If a client catches your oopsie, then not only does it reflect badly on your business, but they can also sue you.
However, if you have professional liability insurance, it’ll cover your legal costs. It can literally save your company’s life.
Commercial Property Insurance
This type of insurance is pretty much a necessity for all businesses.
Whether you rent or own the building your office is in, and the equipment inside it, commercial property insurance will cover you for all this. It’ll protect against theft and compensate you for replacement costs.
Speak With an Insurance Agent
You might have an inkling of what insurance policies are out there after reading the above sections. However, instead of providing clarity, it’s making your head swim.
In that case, speaking with an insurance agent can be helpful. These professionals have experience and knowledge and can sit down with you to discuss possible options.
Not only can they help you assess your risks, but they can also recommend the best policies that’ll cover these risks. While you’re at it, you can ask for quotes too.
This step has the added benefit of seeing whether that agent and/or company is right for you. If you don’t feel listened to and like they’re being pushy with unnecessary plans, then that’s a red flag.
Consider Your Budget
You might think several choices sound nice, and you want to get them all. After all, the more eggs in different baskets, the better, right?
Unfortunately, the majority of policies are expensive. While you’ll get great coverage by getting 10 of them, you’ll bankrupt your company in no time.
Rank the insurance plans you’re interested in. Weigh up these factors:
- Cost
- Risks and liabilities
- Deductible
- Coverage limits
When you’re staring at all these things in the face, you might realize that you don’t need a policy that badly after all.
Get Insurance Bundles
Not all hope is lost if insurance seems too expensive. The good news is, to attract customers, many insurers will bundle multiple policies and offers discounts.
You’ll get to save money, which is already excellent. But even better is, you’ll find all your policies under one roof, which is much more convenient than having to contact several companies.
Keep Reviewing Your Policies
The tough part might be over once you decide which insurance plans are worth your time. But the hard work’s not over yet!
In fact, it’ll never be over. Your company isn’t a stagnant thing, so its needs will most likely change over time.
The best thing to do is to keep reviewing your policies. Keep in mind what coverage you have, and if it still works for your current situation.
The more diligent you are about these reviews, the less risk you’ll take. And you might save some money by switching plans too!
Get the Right Type of Insurance for Your Business
Running a small business on your own can be difficult. Not only do you have to hire excellent staff members, but you also have to handle the boring paperwork and all the nitty-gritty details.
If there’s anything you shouldn’t skip though, it’s insurance. Make sure you do your due diligence and pick the right policies. If anything happens in the future, then you’ll be thanking your lucky stars that you did!
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